nisiprius wrote:Monday's news today: "Stocks rebounded on NASA's denial of reports that an asteroid will strike the earth near Puerto Rico sometimes between September 18th and 28th."

flyingaway wrote:On a day like today, I feel uncomfortable not to buy something, mostly symbolically.

"Mr. Herbert Hoover says that now's the time to buy,So let's have another cup o' coffee, and lets have another piece o' pie!"

I just learned about the asteroid. Thanks. Maybe you are right and Efrain Rodriguez was responsible for the market decline.

Even Hoover was right sometimes.And Bogle is wrong sometimes.It doesn't matter who said something....the "something" must be evaluated on its own merit. The moral....Think for yourself. Don't trust some other guy to do it for you.

There must be some sort of rule pertaining to buying while the market is going down the tank. I ran across one just recently that might work: at the first trigger point (say down 10% for purpose of argument), deploy 25% of your wad and then begin DCAing in the rest over whatever period seems right to you, such as 12 months, 24, 36 -- or until the market is down 50%, whichever comes first. Have any other formulas to share?

We don't know where we are, or where we're going -- but we're making good time.

Browser wrote:There must be some sort of rule pertaining to buying while the market is going down the tank. I ran across one just recently that might work: at the first trigger point (say down 10% for purpose of argument), deploy 25% of your wad and then begin DCAing in the rest over whatever period seems right to you, such as 12 months, 24, 36 -- or until the market is down 50%, whichever comes first. Have any other formulas to share?

There's "Value Averaging", which is DCA on steroids. Problem is, it requires you to make predictions and time the market. If there is a big drop, you'll run out of money to invest.

The method I use is called rebalancing, with a 50/50 Asset Allocation. Works pretty well for me.

L.

You can get what you want, or you can just get old. (Billy Joel, "Vienna")

I'm obviously talking about a situation where the investor has a wad of cash he'd like to put into stocks. If it were already in there, there's no need for a formula for getting into the market, comprende?

We don't know where we are, or where we're going -- but we're making good time.

Browser wrote:There must be some sort of rule pertaining to buying while the market is going down the tank. I ran across one just recently that might work: at the first trigger point (say down 10% for purpose of argument), deploy 25% of your wad and then begin DCAing in the rest over whatever period seems right to you, such as 12 months, 24, 36 -- or until the market is down 50%, whichever comes first. Have any other formulas to share?

My "rule" is to buy funds when S&P is below 2050, and to buy vacations when S&P is above 2050.

I don't keep "dry powder" to buy on dips. Everything I intend to invest, is invested. Guess I can only take advantage of "sales" that coincide with my Jan Roth investments or my bi-weekly contributions. Darn.

surfstar wrote:I don't keep "dry powder" to buy on dips. Everything I intend to invest, is invested. Guess I can only take advantage of "sales" that coincide with my Jan Roth investments or my bi-weekly contributions. Darn.

That's probably the best way to do it, but I'm sure there a plenty of folks like me who have been on the chicken sideline for awhile. We may get the last laugh as we begin to wet our beaks.

We don't know where we are, or where we're going -- but we're making good time.

So I am just wondering what got priced in? Was it the possible .35 percent intrest rate increase getting priced in again? Did people suddenly go, "hey wait, China is a mess?" again? Concerns of deflation again? Only been hearing about that since QE started. First time we are going to raise rates in forever, could be as big as .50% or as small as .25% If they even do it... again, this time for sure, cause they really mean it this time. Emerging markets are not doing well, oil is being depressed by OPEC. Holy cow when did this all happen? Well been going on for years, but don't worry, priced in. Was it not priced in the day before? Nothing really changed, but heck lets just double down on the selling.

You can't price in panic and fear. We need a correction, we need a correction. Don't worry we always find a way to give ourselves one. We may even have a bear market, but at least we are done with limbo, stagnation sucks. Embrace the pain, it isn't over yet. Someone will call a bottom and people will be like hey that's sounds pretty good, lets start buying.

Just took a 63,497.51 hit, that's not a bad a car, that like a loaded S6, I want an R8 though.

Tell you one thing, my bonds, soooo much better at negative correlation than anything international. That seems like good diversification to me. US just dropped a fiver after everyone else closed. Monday should be fun. Should be intresting to see going forward if Captain Jack was right, so far US stock and bond allocation is doing it's job. Even International bonds are holding a negative correlation to equities. Now we got plenty of time to see what international equities do. Feel free to price in the last 10 years. 20 years, whatever. But from the suggestion of increase to 40% international equities, lets see how we do. Nothing may work but we will find out if this high correlation but currency based diversification helps. So far not really helping. Bonds are helping again, international equities not so much, in fact a big part of the problem.

Browser wrote:There must be some sort of rule pertaining to buying while the market is going down the tank. I ran across one just recently that might work: at the first trigger point (say down 10% for purpose of argument), deploy 25% of your wad and then begin DCAing in the rest over whatever period seems right to you, such as 12 months, 24, 36 -- or until the market is down 50%, whichever comes first. Have any other formulas to share?

That's called MARKET TIMING. There is no "formula" for that. You have to guess three times correctly to make it work. When to sell, when to buy, and when to stop selling/buying.

We finally are getting the 10% correction we have not had for a while. We will see whether or not this turns into a true bear market of 20% down. My feeling is that we will see a correction and not a bear market. My predictive powers aren't very good though. What I will say is that market declines like this are normal market behavior. It shouldn't be a surprise as we have had a very strong US Stock Market since 2009.

It also looks like the "Nedsaid U.S. stocks in freefall Boglehead thread contrary indicator" is in pretty serious trouble. Until know, it worked like a charm. The thread would pop up and the markets would rally. It was fun while it lasted.

I think it is important to remember all of these factors, and probably more, work in concert to stoke or soothe one's emotions.

Particularly number 4.

A dip, however small or large, looks worse when you are unemployed. It looks worse if you are carrying a too-large mortgage. It looks worse if you have health issues. It looks worse if you have other demands on your time and resources, demands that aren't deferrable or scalable based on market performance.

It even looks worse if you stub your toe, have low blood sugar, or discover a leaky pipe in your basement. Or read a bunch of negative posts. Emotional triggers feed on one another and can skew an otherwise rational perspective pretty fast.

So if the recent dip really looks bad to you, take a moment to consider why. Is it because your AA is too aggressive? Or is it because other areas of your financial life need more attention than your investments? Or have your emotions temporarily gotten the best of you?

Full disclosure: I'm writing this post with hopes to balance some of the negative over-reaction, but also as a reminder to myself how I felt at this specific moment in time. I hope to refer back to this post in days, weeks, or years when I'm feeling emotional about the market.

I figured out my rebalancing today, and scheduled the trades for Monday. I considered waiting until Monday afternoon but, to be quite honest, I do not know how to react if I then see the market is up or down.

The total moved is less than 1% of retirement assets. Most of the money moved comes out of VBILX, Intermediate Bonds. I suppose it has done relatively well since I last rebalanced in May.

L.

You can get what you want, or you can just get old. (Billy Joel, "Vienna")

Boo-hoo. A few weeks ago I transferred a bunch of money from my bond-heavy balanced fund in my IRA into Total Stock Market in order to use that money for my RMDs in the next 2-3 years. The assumption was that stock funds will do better than bond-heavy balanced funds in this period and I didn't want to sell my balanced fund to satisfy my RMD. Now it looks like I will be reversing this failed "strategy" .

Last edited by Munir on Sun Aug 23, 2015 12:07 am, edited 1 time in total.

I think it is important to remember all of these factors, and probably more, work in concert to stoke or soothe one's emotions.

Particularly number 4.

A dip, however small or large, looks worse when you are unemployed. It looks worse if you are carrying a too-large mortgage. It looks worse if you have health issues. It looks worse if you have other demands on your time and resources, demands that aren't deferrable or scalable based on market performance.

It even looks worse if you stub your toe, have low blood sugar, or discover a leaky pipe in your basement. Or read a bunch of negative posts. Emotional triggers feed on one another and can skew an otherwise rational perspective pretty fast.

So if the recent dip really looks bad to you, take a moment to consider why. Is it because your AA is too aggressive? Or is it because other areas of your financial life need more attention than your investments? Or have your emotions temporarily gotten the best of you?

Full disclosure: I'm writing this post with hopes to balance some of the negative over-reaction, but also as a reminder to myself how I felt at this specific moment in time. I hope to refer back to this post in days, weeks, or years when I'm feeling emotional about the market.

I think it is important to remember all of these factors, and probably more, work in concert to stoke or soothe one's emotions.

Particularly number 4.

A dip, however small or large, looks worse when you are unemployed. It looks worse if you are carrying a too-large mortgage. It looks worse if you have health issues. It looks worse if you have other demands on your time and resources, demands that aren't deferrable or scalable based on market performance.

It even looks worse if you stub your toe, have low blood sugar, or discover a leaky pipe in your basement. Or read a bunch of negative posts. Emotional triggers feed on one another and can skew an otherwise rational perspective pretty fast.

So if the recent dip really looks bad to you, take a moment to consider why. Is it because your AA is too aggressive? Or is it because other areas of your financial life need more attention than your investments? Or have your emotions temporarily gotten the best of you?

Full disclosure: I'm writing this post with hopes to balance some of the negative over-reaction, but also as a reminder to myself how I felt at this specific moment in time. I hope to refer back to this post in days, weeks, or years when I'm feeling emotional about the market.

Best wishes to all!

Agree. However, some of us do not have the luxury or safety of #2. A higher fixed income allocation should address that even though that allocation could also drop (possibly temporarily) whenever the Fed decides to raise rates.

Pinotage wrote:Agree with the numerous other posters that this is just a bump. A blip. A relative nothing.

Couldn't disagree more. At any rate, it would be healthy if the frothy market did crash. China is a real worry. You can ask, justifiably, how events there should affect the share price of Chipotle, to quote Jim Cramer. I don't know why, but it does. But Bogleheads are famous for proudly ignoring world events and staying the course towards the iceberg. Whatever works, I guess.

Pinotage wrote:Agree with the numerous other posters that this is just a bump. A blip. A relative nothing.

Couldn't disagree more. At any rate, it would be healthy if the frothy market did crash. China is a real worry. You can ask, justifiably, how events there should affect the share price of Chipotle, to quote Jim Cramer. I don't know why, but it does. But Bogleheads are famous for proudly ignoring world events and staying the course towards the iceberg. Whatever works, I guess.

Wow! Which iceberg do I not recall?

I don't know if the blip is over, or if the "frothy market" will crash. But, I will rebalance Monday, based on Friday's prices. If the market changes after that, I will rebalance again.

"Chipotle, Jim Cramer, China" in the same paragraph. How does one make sense of that?

L.

You can get what you want, or you can just get old. (Billy Joel, "Vienna")

Ladies and Gentlemen: It's official. US stocks in freefall. DOW futures down by more than 600 points this morning, Monday Aug 24, 2015. The good news is that you'll have an opportunity to check your risk tolerance today. The risk has shown up!

Last edited by Browser on Mon Aug 24, 2015 7:53 am, edited 1 time in total.

We don't know where we are, or where we're going -- but we're making good time.

2Birds1Stone wrote:As a newer investor who dumped his entire net worth into a 80/20 portfolio over the past few months this definitely doesn't feel very good -_-

If it always felt good, everyone would be doing it. The reason you generally make money at this is that there's always the small nagging fear that it will be global and long-lasting. You can't do much about it except lock in the losses, so relax.

2Birds1Stone wrote:As a newer investor who dumped his entire net worth into a 80/20 portfolio over the past few months this definitely doesn't feel very good -_-

If it always felt good, everyone would be doing it. The reason you generally make money at this is that there's always the small nagging fear that it will be global and long-lasting. You can't do much about it except lock in the losses, so relax.

On the other hand, this could get a lot worse. My theory: if you're likely to bail if stocks go down by 25% or more (be honest) then I'd go ahead and bail right now rather than later. Your equity bet was too large and now you know it. Reset.

We don't know where we are, or where we're going -- but we're making good time.

I think ideally, you should emotionally feel pretty good, whatever is happening at any given moment in the market. If you're freaking out when the inevitable drop comes, you were positioned too aggressively to begin with. The only way to stay the course is to know beforehand that you have a portfolio you can live with, when you eventually see all of the typical investment scenarios. Any other portfolio is just wrong, IMO.

Browser wrote:Ladies and Gentlemen: It's official. US stocks in freefall. DOW futures down by more than 600 points this morning, Monday Aug 24, 2015. The good news is that you'll have an opportunity to check your risk tolerance today. The risk has shown up!

This is my first significant downturn since I first started investing. They say you don't really know your risk tolerance until you experience a bear market. So far, I'm feeling pretty good - I'm still rooting for more drops and staying low for a while so I can buy cheaper when I up my 401(k) contributions in Q4!\

On the more unfortunate side, I dumped my entire yearly traditional IRA contribution into the market last Monday, but I'm not too upset.

easye418 wrote:As a newbie to Boglehead, is this one of those days that everyone mentions "you need to stick to the plan and never sell!"?

Absolutely. There's a few things you can do around the edges, but yea, just stick with your IPS. If you want to fiddle (ie, buy some things now that they are on sale), that rule should be written into your IPS in fact.

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easye418 wrote:As a newbie to Boglehead, is this one of those days that everyone mentions "you need to stick to the plan and never sell!"?

Absolutely. There's a few things you can do around the edges, but yea, just stick with your IPS. If you want to fiddle (ie, buy some things now that the are on sale), that rule should be written into your IPS in fact.

IPS? = Investment Planning Strategy?

I did sell my bonds and exchanged last Friday. Shoulda just stayed to the course.

Last edited by easye418 on Mon Aug 24, 2015 8:54 am, edited 1 time in total.